On October 10th 2017, a loan agreement was signed between the Government of the Republic of Nicaragua and the Japanese International Cooperation Agency.



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ODA Loan Agreement with Nicaragua: Contributing to Improving Logistics in Poor Areas through Bridge Construction Projects

Inception date: 10 Oct 2017 | Removal date: open ended

Trade finance

On October 10th 2017, a 4.94 billion yen ($44 million USD) loan agreement was signed with the Government of the Republic of Nicaragua and the Japanese International Cooperation Agency (JICA) for the construction of four bridges between the cities of Rio, Branco, and Suina on the national road system towards Managua and the Autonomous Region of de la Costa Caribe Norte. This loan will be part of the Japanese International Cooperation Agency's STEP program which implies that the loan will go towards providing the Nicaraguans with Japanese civil engineering works, consulting services, project management and construction supervision. As agreed upon by the Republic of Nicaragua and JICA, this project will be lead by a Kyōdō Kigyōtai (Joint Enterprise run by a Japanese corporation). 

The loan agreement has a redemption period of 40 years with an interest rate of 0.1% for the financing of the infrastructure portion and a 0.01% interest rate on the consulting services. The project is planned to be finished by June 2022. 

Special Terms for Economic Partnership (STEP)
A stipulation in JICA ODA loan agreements which promotes the use of advanced Japanese technologies and the employment of Japanese firms in overseas agreements.

Overseas investment loans
JBIC provides direct loans named overseas investment loans to Japanese companies, overseas affiliates or joint ventures where Japanese companies hold equity interests and governments or financial institutions partying with such overseas affiliates. Loans support projects in specific sectors or with a specific purpose of interest to Japan. Further information can be found on the Bank’s website under overseas investment loans.

Project finance
Project financing loans include preferential terms such as repayments being solely made from the project’s cash-flow generation and secured on the basis of the project's assets alone. As such the loan agreement is tied to the project's finances and not the company in question.

The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.